Cryptocurrency Tax in Cyprus: Individuals & Firms

Cyprus offers one of the most competitive tax environments in the European Union for cryptocurrency activity. From 1 January 2026 the tax treatment of crypto-assets is no longer a matter of interpretation: Cyprus has introduced a dedicated statutory regime that taxes gains from the disposal of crypto-assets at a flat rate of 8%.

This article explains how the 8% regime works for individuals and for companies, what counts as a taxable disposal, how mining and staking are treated, and how losses are handled. The new rules replace the previous framework, under which crypto had no dedicated legislation and the tax result depended on whether an activity was capital or trading in nature.

Cryptocurrency Taxation for Individuals

For individuals who are Cyprus tax residents, gains from the disposal of crypto-assets are taxed at a flat 8% under Article 20E. The provision applies to "any person", so the previous distinction between long-term investors and frequent traders no longer determines the tax outcome.

What counts as a disposal:

A taxable disposal includes selling crypto-assets for fiat currency, exchanging one crypto-asset for another, using crypto-assets to pay for goods or services, and gifting or donating crypto-assets. Each of these events can crystallise the 8% tax on the gain realised.

How the gain is taxed:

The 8% applies to the net profit, meaning the disposal proceeds less the allowable acquisition cost and directly related expenses. The taxed gain is ring-fenced and is not added to the individual's other income, so it does not push salary or other earnings into higher tax bands. Mechanics such as the accepted cost method are expected to be clarified through Tax Department guidance.

Mining and staking:

Crypto-assets obtained through mining are excluded from Article 20E and are taxed under the general income tax rules, at rates of up to 35% for individuals. Staking and similar rewards are generally treated as ordinary income when received rather than as disposals, and a later disposal of those assets then falls within the 8% regime.

Cryptocurrency Taxation for Companies

Cypriot companies fall within the same regime. Because Article 20E applies to any person, a company that is a Cyprus tax resident pays a flat 8% on the net profit from disposals of crypto-assets, whether it holds them as investments or trades them actively.

Income outside the disposal rule:

Company income that does not arise from a disposal of crypto-assets remains under the ordinary corporate tax rules. Mining income and staking rewards, for example, are taxed at the standard corporate income tax rate of 15%.

"Tax Ruling" Decisions

Even with a dedicated regime in place, questions of characterisation can still arise, for example whether a particular activity is a disposal within Article 20E, a mining activity, or the provision of a service. Taxpayers (individuals or companies) can request a "tax ruling" from the Tax Department to confirm the treatment of specific transactions before they file.

Tax rulings can be issued through a fast-track process within one month, costing €2,000, or through a standard process that takes two to three months, costing €1,000.

Benefits of Establishing a Company for Cryptocurrency Transactions in Cyprus

For those active in crypto-assets, Cyprus combines a low headline rate with a clear and predictable framework:

Competitive 8% Disposal Tax:

Gains from crypto-asset disposals are taxed at a flat 8% for both companies and individuals, one of the lowest dedicated crypto rates in the European Union, with no holding-period condition and without stacking onto other income.

Standard Corporate Tax on Other Activity:

The corporate tax rate in Cyprus is 15%, which applies to company income that falls outside the disposal rule, such as mining and staking.

Dividend Benefits:

Dividends paid to shareholders who are Cyprus tax residents and hold Non-Dom status are only subject to a General Healthcare System contribution of 2.65%, capped at €4,770 per year.

Dividends received by non-Cyprus tax resident shareholders are taxed in their country of tax residence, with no withholding tax in Cyprus.

Conclusion

Cyprus has moved from an interpretive framework to a dedicated statutory regime for crypto-assets. From 1 January 2026, Article 20E taxes gains from crypto-asset disposals at a flat 8% for both individuals and companies, while mining and staking are taxed under the ordinary rules and losses are ring-fenced to same-year crypto gains. The result is a low and predictable rate combined with the certainty of clear legislation, keeping Cyprus among the most attractive jurisdictions in the European Union for crypto-related activity.

At Philippou Law Firm, we provide tailored guidance for individuals and businesses across the crypto-asset sector, from confirming the correct Article 20E treatment to structuring and compliance. Contact us today to ensure your crypto-related activities in Cyprus are both compliant and tax-efficient.